Surety and fidelity are among the most commonly requested bonds – in some instances they are mandated by federal, state, and/or local government.
Sureties are commonly asked for from contractors, suppliers, and manufacturers. They ensure that the finished product will be delivered on time. Whether it’s a university apartment complex that must be finished in time for fall enrollment or a retail building that must be ready to open by Black Friday, they are generally used to guarantee that a specific, and often crucial deadline is met.
In the world of government contracts it can be something like having a section of highway open for the primary tourist season. When businesses ask for surety them, it’s not so much a sign of distrust so much as a sign of how important a specific deadline or milestone is to meet.
The following businesses are businesses for which security bonds are commonly requested:
These are just a few of the highlights. The truth is that any client or potential client can request them. It is up to you to decide if you’re willing to issue one in order to obtain a client or preserve the client relationship. In some cases, though, they are a legal requirement in order to operate your business. In those instances, it’s a requirement rather than a choice.
Fidelity bonds, on the other hand, protect your business and your clients from dishonest employees who commit acts against your business or clients, such as embezzlement, theft, forgery, and more.